Correlation Between Visa and Alpha Healthcare

Can any of the company-specific risk be diversified away by investing in both Visa and Alpha Healthcare at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Visa and Alpha Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Visa Class A and Alpha Healthcare Acquisition, you can compare the effects of market volatilities on Visa and Alpha Healthcare and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Visa with a short position of Alpha Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Alpha Healthcare.

Diversification Opportunities for Visa and Alpha Healthcare

0.0

Correlation Coefficient

Visa  Alpha Healthcare

Pay attention - limited upside

The 3 months correlation between Visa and Alpha is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Alpha Healthcare Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpha Healthcare Acq and Visa is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Visa Class A are associated (or correlated) with Alpha Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpha Healthcare Acq has no effect on the direction of Visa i.e., Visa and Alpha Healthcare go up and down completely randomly.

Pair Corralation between Visa and Alpha Healthcare

If you would invest  32,065  in Visa Class A on October 25, 2024 and sell it today you would earn a total of  291.00  from holding Visa Class A or generate 0.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	5.56%
Values	Daily Returns

Visa Class A  vs.  Alpha Healthcare Acquisition

Visa Class A

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Visa Class A are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Visa showed solid returns over the last few months and may actually be approaching a breakup point.

Alpha Healthcare Acq

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alpha Healthcare Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Alpha Healthcare is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Visa and Alpha Healthcare

The main advantage of trading using opposite Visa and Alpha Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Alpha Healthcare can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Alpha Healthcare will offset losses from the drop in Alpha Healthcare's long position.

The idea behind Visa Class A and Alpha Healthcare Acquisition pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Share Portfolio module to track or share privately all of your investments from the convenience of any device.